Maritime Transport and Security

Maritime Transport and Security

Securing Energy Transportation in the Straits ofMalaccaNazery Khalid and Mohd Nizam Basiron*Maritime Institute of Malaysia, Kuala Lumpur, Malaysia

THE IMPORTANCE OF THE STRAITS OF MALACCA

The Straits of Malacca (Figure 1) is one of the world’s most strategic andimportant shipping lanes. It is a vital artery linking the region’s economywith the rest of the world. Located in one of the world’s most vibrant areasof economic growth, the Straits is a pivotal link in international trade andtransportation. Because the Straits carries half of the world’s oil suppliesand a third of world trade, the issue of maritime trade and energytransportation in the Straits is a matter of international concern.

The Straits is a sea-lane of immense strategic, political and economicimportance, not only to the littoral States—namely Malaysia, Indonesia andSingapore—but also to the international community. Regional economicpowerhouses such as China, Japan, and Korea view security in the Straits,through which much of their trade and energy imports are transported,from a strategic standpoint. China for example, depends on the Straits tocarry much of its international trade and much of its energy imports, largelyfrom the Middle East. Given such dependency, it is little wonder that Chinaand many other energy-dependent countries in the region have anincreasingly huge interest in keeping the Straits secure and safe.

As an example of the geo-political rivalry and multiple interests at workin the Straits, China is concerned that the United States may adapt a ‘‘Chinacontainment’’ policy that seeks to deny Beijing crucial energy supplies bycontrolling access at chokepoints in the Straits. In the event of hostilitybreaking out between the U.S. and China, it is foreseeable that the Straitswill become the theater for the two States’ maneuvers, naval and otherwise,to neutralize each other.

The above highlights the prominence of the Straits of Malacca as one ofthe world’s most crucial and strategic energy transportation routes.

*The views expressed herein are entirely personal and do not reflect the officialviews of the Maritime Institute of Malaysia.

Ocean Yearbook 22: 513–533.

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514 Maritime Transport and Security

Geopolitical and economic developments have put the Straits into thespotlight as a sea line of communication (SLOC)1 of immense globalimportance. Therefore, its features as an energy transportation channel andthe dynamics involved warrant close observation as a prelude to drawing upappropriate responses to the challenges faced by the straits as a premiereenergy sea-lane.

SHIPPING TRAFFIC IN THE STRAITS OF MALACCA

In 2006, over 65,000 ships2 sailed through the Straits of Malacca, making itone of the world’s busiest sea-lanes. This figure is expected to grow in thecoming years in light of the increase in global trade, the rise of East Asianeconomies, and the accompanying upsurge in the demand for shippingservices to transport the majority of their trade.

This expansion of trade will most definitely exert a bigger financialdemand to the littoral States to ensure navigational safety of the burgeoningtraffic in the Straits and to protect the Straits from marine pollution. Theheightened perception of risk to ships traversing the Straits due to threats ofpiracy and terrorism has further added to this burden, and many expensiveinitiatives have been introduced by the littoral States to improve security inthe crucial waterway.

Given the situation, the littoral States are rightfully concerned aboutthe high costs they have to bear in maintaining and upgrading initiativesalready in place and perhaps introducing new ones in due course in orderto meet the expectations of international users of the Straits. Huge amountsof money and other resources have already been spent by the littoral Statesto facilitate smooth and safe traffic in the Straits.3 Considering that an

1. The concept of sea lines of communication (SLOC) accords the world’sstrategic waterways, such as the Straits of Malacca and the Straits of Hormuz, thestatus of ‘‘maritime highways’’ that facilitate the vast trade flows critical to globaleconomic prosperity. Such passages are exposed to various elements that threatentheir security and access. These elements include military concerns involving threatsemanating from the conflicts between nations and from sea mines as well as non-military elements including natural disasters, navigation-related accidents, pollution,piracy, terrorism, and the ‘‘creeping jurisdiction’’ of regional States.

2. Based on the number of ships reporting to the Straits of Malacca’s ShipReporting System (STRAITREP). STRAITREP is a mandatory reporting system thatcaptures the statistics of ships traveling between the Vessel Traffic System (VTS)centers established in Port Klang and Tanjung Piai along the Malaysian coastbordering the Straits.

3. An official of Aegis, the security and intelligence agency that acts as aconsultant to Lloyd’s Market Association of London, estimated that the littoralStates had invested over US$1 billion to procure equipment and put in place andtrain manpower to improve security in the Straits.

Securing Energy Transportation in the Straits of Malacca 515

Fig. 1.—Map of the Straits of Malacca

estimated 80 percent of vessels traversing the Straits are merely in transitand do not stop at ports along it, the littoral States are understandablyaggrieved by the expenses they have to bear to maintain the waterway. Theexpectation of safe passage by the international users of the Straitsincreases, but their increasingly intensive use of the waterway is not matchedby their assistance to maintain the Straits.

There have been various studies attempting to collate statistics fromvarious perspectives to capture the traffic volume in the Straits. A few studiesconcentrated on the navigational safety aspect of shipping in the Straits.One such study focused on capturing the number of ships or shippingmovements contributing to congestion at confined channels of the Straits.4Another study attempted to gauge the total number of ships calling at theports along the Straits by defining their passage as passing by such confined

4. S. Gran, ‘‘Malacca: The Impact of Transportation of Wildlife in the MalaccaStraits,’’ TED Case Studies 9(3), September 1999, available online: <http://www.american.edu/ted/malacca/htm>.


Table 1.—Shipping Traffic Volume in the Straits of Malacca, 2000–2005

Year Number of vessels

2000 55,957

2001 59,314

2002 60,034

2003 62,334

2004 63,636

2005 62,621

2006 65,649

Source: Marine Department of Malaysia.

channels, namely around One Fathom Bank Lighthouse off Port Dickson,Philip Channel, and Middle Channel off Horsburgh Lighthouse.5 Japan alsoconducted studies in 2000 and 2001 on traffic in the Straits for the MaritimeSafety System Development Plan for Indonesia.

Several studies have highlighted the critical role of the Straits infacilitating global energy transportation and have examined shipping trafficin the Straits from an economic perspective.6 One oft-cited study on thesubject focused only on the traffic of oil in the Straits, estimating that 9.5million barrels of oil passed through the sea-lane in 1997 and projected thatthe capacity will grow to 20 million barrels in 2020.7

Despite the collation of data and the studies conducted to date,obtaining accurate shipping statistics in the Straits presents a challengingtask due to the fact that through traffic need not report at any callingstations along the Straits. Although there are reporting systems such as theVessel Traffic Information Service (VTS)8 in use in the Straits, reporting is

5. R.M. Kamarulzaman, ‘‘Navigational Safety in the Straits of Malacca,’’ paperpresented at the Conference on Navigational Safety and Control of Pollution in theStraits of Malacca and Singapore, 2–3 September 1996.

6. See G. Naidu, ‘‘The Straits of Malacca in the Malaysian Economy,’’ in TheStraits of Malacca: International Cooperation in Trade, Funding and Navigational Safety,ed. B.A. Hamzah (Kuala Lumpur: MIMA, 1997); and J.H. Noer, Chokepoints: MaritimeEconomic Concerns in Southeast Asia (Washington D.C.: National Defense UniversityPress, 1996).

7. C. Baldwin, ‘‘Seaborne Trade Flow in the Asia Pacific: Present and FutureTrends,’’ Royal Australian Navy Sea Power Centre and Center for Maritime PolicyWorking Paper No. 9 (Wollongong: University of Wollongong, 2001).

8. VTS provides active monitoring and navigational advice for vessels inparticularly confined and busy waterways. There are two main types of VTS:surveillance-based and non-surveillance based. Surveillance-based VTS consists of


done on a voluntary basis and is limited to certain calling points. The task ofquantifying traffic density is made harder because ships do not followspecific routes except at portions of the Straits under the coverage of thevarious navigation systems in the Straits such as the Automatic IdentificationSystem (AIS) and the Traffic Separation Scheme (TSS). This is compound-ed by the unrecorded cross-traffic of barter ships between PeninsularMalaysia and Sumatra and the presence of unknown numbers of smallfishing vessels and traditional small craft. Adding to the statistical discrepan-cy is the fact that not all ships using the Straits call at the ports of the littoralStates. Even in the case of ships calling at these ports, not all of them use thewhole stretch of the Straits, and may therefore go unrecorded when tallyingtraffic volume in the sea-lane.

THE STRAITS OF MALACCA AS A STRATEGIC SEA-LANE FORENERGY TRANSPORTATION

In today’s increasingly integrated global economy, energy supply is vital tointernational trade, transport, and economic systems. Hence, energytransportation in strategic sea-lanes that facilitate much of global seabornetrade, such as the Straits of Malacca, has come into sharp focus. The issue ofnavigational safety and security in such a critical passageway has become aninternational cause celebre.

One of the most notable trends in the world economy of late is thetremendous growth of oil consumption in developing countries. Thisphenomenon can be attributed to various factors, including rising econom-ic prosperity, industrialization, increasing consumer demand, and increas-ing demand for transport, among many others. The Energy InformationAdministration of the U.S. Department of Energy has forecast that growthin oil use in developing economies is expected to average 3.5 percentannually, leading to the consumption of 42.7 million bpd9 or 41 percent ofglobal demand in 2015.10 Comparing this to the 21.4 million bpd or 31percent of world consumption in 1995,11 one can only gasp at thetremendous growth in the demand for energy in developing countries nowand in the future.

one or more land-based sensors such as radars, Automatic Identification System(AIS), and closed circuit television sites that send signals to a central location whereoperators monitor and manage vessel traffic movement. Non-surveillance based VTSconsist of one or more reporting points at which ships are required to report theiridentity, course, speed and other data to the monitoring authority.

9. Barrels per day.10. See <http://www.eia.doe.gov>.11. Id.


The growing status of East Asia, in which many developing nations arelocated, as a global hub for commerce, trade, and economic growth hasbeen well documented. Central to the East Asian success story is the rise ofChina as the world’s newest economic superpower; China’s rise hasdramatically altered the dynamics of trade and economy not only in thisregion but worldwide. China is now the world’s second largest economy andthe third largest trading nation, and its appetite for energy sources andcommodities has almost single-handedly propelled the global economicengine.12 It is already the world’s second largest oil consumer after the U.S.,and its imports of crude oil are expected to rise in tandem with thetremendous momentum of its economic growth.13

One of the sectors that have felt the most impact of China’s breakneckeconomic growth is energy transportation. Most of China’s energy imports,and those of East Asia’s other economic behemoths such as South Koreaand Japan, come from the Middle East and are transported via the Straits ofMalacca. As such, the safe and smooth movement of energy import throughthe Straits has become an issue of paramount concern and strategicimportance to these countries. Reflecting the increasing importance ofseaborne energy transportation, 1.77 billion tons or 76 percent of globaltotal shipments of tanker cargos in 2004 were crude oil shipments.14 Thisrepresented an increase of 4.8 percent from 2003, underlining growingglobal appetite for hydrocarbon resources.15 The main discharging areaswere located in developed market-economy countries, but it was notablethat developing countries in South East Asia imported close to 300 milliontons and China imported nearly 100 million tons of oil—both figuresrepresenting substantial increases from previous years.16 Much of this oil,coming from ‘‘traditional’’ areas (mainly in West Asia, which provided closeto 900 million tons of sea-bound imported oil) passed through the Straits ofMalacca.17 The shares of developing countries in Asia in the exports ofpetroleum products are also growing, reflecting the growing refiningactivities in the region. Once again, the Straits play a vital role in facilitatingthe exports of those products from the region to markets worldwide.

In addition to oil, liquefied natural gas (LNG) shipments via the Straitshave also grown. In 2003, LNG shipments via maritime transport grew by

12. ‘‘Mainland now a key global economic player,’’ The Star (Dec. 11, 2006).13. W. Lim, ‘‘Challenge for Asia to Meet Energy Needs,’’ New Straits Times (Nov.

6, 2004), p. B12.14. UNCTAD, Review of Maritime Transport 2005 (Geneva: UNCTAD, 2005),

p. 4.15. Id., p. 7.16. Id.17. Id.


Table 2.—Share of Oil Tankers and LNG Carriers in World Fleet Size(in thousands of dead weight tons)

Percent of Percent of Percentworld total world change

Type of vessel 2004 2004 2005 total 2005 2004–05

Oil tankers 316,759 37 336,156 37.5 6.1

Liquefied gas carriers 19,469 2.4 20,947 2.5 7.6

World total of vessels 856,974 895,843

Source: UNCTAD.

12.5 percent to around 167 bcm18 of natural gas.19 Although this representsmerely 6.4 percent of world production, the double-digit growth highlightsthe increasing role of shipping in transporting LNG. The largest importingarea for LNG is East Asia; Japan and South Korea lead the way and arepurchasing a growing volume of LNG from West Asian countries such asSaudi Arabia and Qatar. Much of this volume is also transported via theStraits.

With the increasing consumption of energy in China and otherdeveloping South East and East Asian economies, the importance of theStraits of Malacca in facilitating energy transportation has grown tremen-dously. The increase in the tonnage of oil tankers in and liquid gas carriersworldwide (Table 2) suggests that energy transportation traffic in the Straitswill increase further in the years to come.

Challenges Facing the Straits of Malacca as a Vital Energy Sea-lane

As a vital energy sea-lane, the Straits of Malacca faces a compendium ofthreats that go beyond ‘‘traditional’’ security concerns such as piracy andthe smuggling of illegal immigrants and contraband goods. In the post-9/11security matrix, the potential threat of terrorism, no matter how remote, hasbeen added to a long list of threats facing the Straits. Together, these threatspose concerns for the littoral States and indeed for all countries with anystake in the Straits which acts as a crucial facilitator of global energytransportation.

The nature of energy as an indispensable and almost irreplaceableenabler of the global economic system makes energy transportation an issue

18. Billion cubic meter, a standard industry measurement for LNG shipmentcapacity.

19. UNCTAD, see n. 14 above, p. 11.


of tremendous strategic importance. Greater focus has been trained onsecuring the energy supply chain from the point of production to the pointof consumption.20 The chain is linked by various transport modes and nodesin a long network of interactive, interdependent components and systemsthat bring oil and gas from the wells to energy markets and consumers. Thenature of global energy production, storage, and transportation is such thatany major attack at any point of the energy supply chain could have apotentially disastrous effect on the global economy.

Maritime transport, which carries a majority of the world’s energytrade, is key to this chain. After the 9/11 attacks, some analysts havesuggested that ships carrying oil and gas might be vulnerable to assaults byterrorists hell-bent on creating the ‘‘nautical version of 9/11.’’ The attackon French-owned supertanker MV Limburg in the Arabian Sea in 2002demonstrated that oil tankers are fair game for terrorists.21 A terrorist attackon an oil complex in Abqaiq in Saudi Arabia in February 2006 furtherdemonstrated the terrorists’ ‘‘interest’’ in such targets.22 The call by Osamabin Laden, alleged leader of the Al-Qaeda group on which the 9/11 attackswere blamed, for his followers to hit oil targets only heightened anxiety overthe security of the energy supply chain and energy transportation.23

As a pivotal waterway of global energy transportation, the Straits ofMalacca is at the center of global attention to securing energy transporta-tion via maritime means. In today’s fast-changing world, the Straits has facedvarious dramatic and dynamic forces. Developments in global trade,economy, transportation, security, and geopolitics, among many others,have had significant effects on the flow of energy transportation through theStraits. The littoral States and other stakeholders of the Straits must adaptand change in response to these developments. The New World order andits fresh paradigms call for a thoughtful management of the Straits, in linewith today’s realities, that can cope with the increasing traffic volume andthe multiple interests at stake in the Straits.

20. The energy supply chain involves a complex link of activities, systems,equipment, processes, structures, information, players and many other components.It begins from the oil wells all the way to the gas tanks of the consumers,encompassing vulnerable equipment and machineries such as oil rigs, offshoreplatforms, storage vessels, ocean-going tankers, tank farms, storage facilities,refineries, gas stations, and many other components deemed potentially lucrativetargets for terrorists and saboteurs.

21. ‘‘Tanker Blast: Experts Cry °Osama!,’ ’’ Asia Times (Nov. 9, 2002).22. See ‘‘Al Qaeda behind °Saudi oil plot,’ ’’ available online:

<http://news.bbc.co.uk/2/hi/middle east/4749812.stm>.23. See ‘‘Oil Markets at Risk from Terror Hit: Experts,’’ available online:

<http://www.turkishpress.com>.


Challenges Facing Stakeholders in the Straits

Increasing Traffic Volume

The tremendous explosion in foreign trade has led to increasing trafficvolume in the Straits and thus congestion. The littoral States must meet thedemands of such a situation head-on and address issues arising from thecapacity strains caused by increasing traffic in the Straits.24 As such, it iscrucial for the littoral States to come up with sound policies and developeffective solutions to managing traffic in a waterway of such importance. Asthe Straits continue to grow in terms of strategic importance, the world willexpect the littoral States to continuously improve the management of thewaterway.

It is expected that the volume of traffic of ships carrying energyresources in the Straits will increase in the years ahead, as demand forenergy in the region grows, mainly fueled by the astounding rise of China asan economic superpower. The ever-increasing traffic in the Straits adds tothe challenge in navigating this waterway, which has a width of only onekilometer at its narrowest point. Its challenging navigational features,coupled with the huge traffic volume, make the Straits vulnerable to shipcollisions and groundings.

Rising Threat of Pollution

The threat of shore-based pollution arising from the increasing risk of shipscolliding and running aground as a result of increasing shipping volume inthe Straits looms large. In addition, threats from land-based sources canpose a considerable threat to the ecosystem of the Straits. The vulnerabilityof the Straits’ environment, and the need to protect that environment, haslong been recognized by the international community. The presence of somany small craft in the Straits presents a hazard to larger vessels, althoughlarger vessels do take precautions to avoid colliding with them.25 Navigationof larger vessels in the Straits is made more challenging by the presence ofsandbanks and rock outcrops and the narrow channels.

Over the years, several incidents have occurred in the Straits involvingships releasing oil and hazardous and noxious substance (HNS) into the

24. In this respect, the Tripartite Technical Experts Group (TTEG), formed in1975 and consisting of officials from the three littoral States, has been instrumentalin enhancing navigational safety in the Straits.

25. J. Lamri and M.H. Saidi, ‘‘Navigational Safety in the Straits of Malacca: AnAssessment from the Bridge,’’ (5th MIMA Conference on the Straits of Malacca:Present and Future Perspectives, Kuala Lumpur, 1–2 Aug. 2006).


Table 3.—Major Pollution Incidents in the Straits of Malacca and Singapore

Type of oil Quantity of spillage LocationYear Vessel and HNS (barrels) Cause

1975 Showa Maru Crude 54,000 Straits of SingaporeGrounding

1992 Nagasaki Spirit Crude 100,000 Straits of MalaccaOcean Blessing Collision

1997 Evoikos Crude 175,000 Straits of SingaporeOrapin Global Collision

1999 Sun Vista Fuel oil 14,000 Straits of MalaccaSinking

2000 Natuna Sea Crude 49,000 Straits of SingaporeGrounding

2001 Indah Lestari Phenol 89 Johor StraitsSinking

Source: Department of Environment, Malaysia.

waters. These incidents underline the risks confronting ships in this busywaterway and the environmental threat to the Straits from the increasingtraffic volume. Between 1973 and 2003, 888 accidents were recorded in theStraits. While most of these accidents were minor, major accidents involvingthe Diego Silang grounding in 1978, the Nagasaki Spirit/Ocean Blessingcollision in 1992 and Evoikos/Orapin Global collision in 1997 did show thevulnerabilities of the marine environment in the Straits. In all of theseincidents, oil was spilled into the Straits and adversely affected thesurrounding marine environment (Table 3).

Malaysia has put in place plans and equipment to combat oil spills in itswaters. Its oil spill control stockpile in the Straits has a 123,000-barrel(16,850 metric tons) capacity and has been mobilized on a number ofoccasions to combat oil spills. Malaysia is party to international conventionsintended to minimize and prevent oil pollution from shipping, namely theInternational Convention on Oil Pollution Preparedness, Response and Co-operation, 1990 (OPRC Convention and Annex I, II and V) and theConvention on the International Regulations for Preventing Collisions atSea, 1972. At the national level, there is an oil spill response program basedon the National Oil Spill Contingency Plan, under the operation of theDepartment of Environment with the Marine Department functioning asthe on-site commander. The plan, which has been in existence since 1976,divides the national response into three tiers which require the mobilizationof ‘‘local’’ or ‘‘on-site’’ oil spill plan and equipment; the national oil spillplan and equipment; and the regional oil spill plan and equipment. Taken


together, these international and national measures play significant roles inprotecting the nation’s maritime environment.

The Malaysian oil spill control stockpile in the Straits of Malacca hasbeen mobilized on a number of occasions to combat oil spills. Similarly,Singapore’s contingency plan was activated and its resources mobilized tocontain the spill from the Evoikos/Orapin Global incident in 1997.26 In thecase of the Evoikos, oil spill control equipment from Malaysia was alsomobilized27 and equipment from Indonesia was placed in reserve. Thisincident illustrated the combined capabilities of the littoral States to handleoil spills in the sea-lane. However, the increase in tanker traffic in the Straitsdoes place additional potential pressure on these resources. Aware of theincreased pressure emanating from the growing traffic, the littoral Stateshave become parties to international conventions intended to minimize andprevent oil pollution from shipping (Table 4). Only Indonesia is not partyto the OPRC Convention aimed at establishing national level oil spillcontrol capabilities. Nevertheless, Indonesia does have oil spill controlequipment stockpiles provided by the ASEAN-OSPAR project.

Protecting the marine environment from vessel-based pollution isclosely linked to navigational safety, which in turn is related to trafficvolume. The littoral States therefore face a huge challenge in mitigating therisk of pollution in the Straits in the years to come.

Rising Cost of Management and Maintenance

International users consider the Straits an international sea-lane to whichthey have a right to use, as provided for in Part III of the United NationsConvention on the Law of the Sea (UNCLOS) 1982, on transit passage ofstraits used for international navigation. Nevertheless, the efforts ofmaintaining and securing the waterway have always been undertaken by thelittoral States, and much of the costs have been borne by them as well.

The high expectations of international users and the ever-burgeoningtraffic in the Straits have combined to exert considerable demand on thelittoral States to provide the maritime infrastructure to ensure security andnavigation safety in the waterway. This further adds to the burden of thelittoral States, which include developing nations with limited resources andmore pressing priorities.

26. E.S. Heah, ‘‘Safety of Navigation in the Singapore Strait,’’ The SingaporeYearbook of International Law. Special Feature—International Year of the Oceans 2(2),(1998): 497–503.

27. B. Dicks, T. Moller, and R. Santner, ‘‘The Evoikos and Pontoon 300Incident: The Technical Advisers’ Perspective,’’ (Petroleum Association of Japan OilSymposium, Tokyo: 7–8 Oct. 1998).


Table 4.—Status of Ratification of IMO’s Pollution Prevention Conventionamong the Littoral States of the Straits of Malacca

Conventions Indonesia Malaysia Singapore

MARPOL 73/78 Annex I Annex I, II, Annex I, II, III,and II and V IV, V and V

International Convention on Oil • •Pollution Preparedness, Response andCo-operation, 1990 (OPRC)

International Convention on theControl of Harmful Anti-foulingSystems on Ships 2001

International Convention for the Controland Management of Ships’ BallastWater and Sediments 2004

Convention on the International • • •Regulations for Preventing Collisionsat Sea, 1972

Despite the fact that many new initiatives have been introduced toimprove security in the sea-lane, it is regrettable to note that theinternational users, save Japan which provides assistance to enhancenavigational safety in the Straits via funding from the Nippon Foundationthrough the Malacca Straits Council, have thus far not matched their usageof the Straits with contributions to the costs of maintaining and securing it.Japan has provided a significant amount of funding and resources to installand maintain navigational aids in the Straits as well as pollution-preventingmeasures.

Many systems and equipment have been put in place to improve andmaintain the management of the Straits. However, the rising volume oftraffic in the Straits increases the risk of collisions on ships, and thusrequires more resources and investments. This will exert a tremendousfinancial burden to the littoral States in the years to come. Taking intoaccount the fact that the majority of ships merely pass through the Straitswithout calling at the ports along the Straits, the expenditure that thelittoral States have to bear is grossly disproportionate to the economicreturns they gain from the shipping traffic.

The need for burden sharing to maintain the Straits was reiterated bythe littoral States at the IMO Meeting in Jakarta on 7–8 September 2005.They took the discussion further during the IMO Kuala Lumpur Meeting,on 18–20 September 2006, and called for efforts to expedite the matter in a


more resolute manner. This underlines their growing concern with therising costs they face, and brings into focus their underlying frustration thatthe international community has not matched their heavy usage of thewaterway with providing assistance to the littoral States.

Strong voices were heard during the Kuala Lumpur Meeting to thateffect. A senior delegate from Singapore stressed the need for the littoralStates and the stakeholders to go beyond the confidence-building stage toconcrete collaboration by realizing modalities for cooperation betweenthem. He reiterated that the widening range of stakeholders and the raisingof confidence and comfort level between them have created an environ-ment that is conducive to cooperation. All around, the littoral States agreedto foster, enhance, and extend cooperation and operational arrangementswith a view to further strengthening capacity building among them duringthe meeting to ensure the safety of ships traversing the Straits, with theconcurrence of delegates from various nations and stakeholders.

Rising Perception of Security Threats

The 9/11 attacks have spurred the maritime sector to reassess its vulnerabili-ties against potential acts of hostility and sabotage. The aftershocks of deathand destruction caused by those attacks have forced the sector to focus onmitigating security risks to its operations, systems and procedures.

Nowhere does the issue of maritime security come into sharper focusthan in the strategic waters of the Straits of Malacca. In the wake of the 9/11incident, this crucial passage suffered from bad public relations and wasdeemed a high-risk area due to its image as a piracy-prone area and theperceived threat of terrorism in its waters. Of the major concerns in theStraits, ensuring the safe passage for vessels traversing it is the most pivotal.The scourge of potential terrorism has added an extra burden to the littoralStates, which are already saddled with the threat of piracy.

The intense concentration in energy transportation in the Straits hasprompted several security analysts to speak of the probability of terroristattacks on oil- and gas-bearing ships in the waterway. In addition to suchrumors, there is a tendency in some quarters to link piracy and terrorism,which has fanned negative media coverage on the actual security situationin the sea-lane, despite the fact that no concrete nexus has been proven toexist between the two. Such fear mongering based on questionable opinionsand analysis led to the categorization of the Straits as a ‘‘war risk zone’’ bythe influential underwriters, Lloyds Market Association (LMA) of London,in June 2005. Maritime underwriters swiftly took advantage of the declara-tion to raise insurance premiums on ships passing through the Straits.


The International Maritime Bureau (IMB)28 reported that attacks(actual and attempted) attributed to pirates in the Straits of Malacca fellfrom thirty-eight in 2004 (Figure 2) to twelve in 2005 (Figure 3).29 Most ofthese were merely ‘‘maritime muggings’’ of prosperous-looking vessels byattackers in small boats with fast outboard motors.30 Between January andSeptember 2006, the IMB recorded a total of eight attacks in the Straits,further underlining the much-improved security situation in the waterway.Based on the drastic reduction of attacks—largely credited to the tirelessefforts taken by the littoral States to boost security in the waterway—theLMA revoked its ‘‘war risk zone’’ listing of the Straits of Malacca in August2006.

However, despite the sharp reduction in piratical attacks in recent yearsand zero incidence of terrorist attacks on ships sailing through the Straitsthus far, the world continues to have the impression that this prime passageis unsafe for vessels. This negative perception needs to be put to rest in viewof the marked decline in piracy incidents, largely as a result of theunrelenting efforts of the littoral States to maintain security in the Straits.

It is crucial at this juncture to separate piracy31 from terrorism.32 From areview of the literature on the two subjects, it can be surmised that pirates

28. The IMB is a Kuala Lumpur-based organization dedicated to the preven-tion of fraud in trade finance, maritime, transport, and trade malpractice. It acts as afocal point for the international trading and shipping industry and those associatedwith facilitating the movement of goods. The IMB also manages the InternationalChamber of Commerce (ICC) Piracy Reporting Center, dedicated to the suppres-sion of piracy and armed robbery against ships.

29. The IMB attributed the reduction in the number of attacks largely to theincreased patrols in the Straits of Malacca by the navies of the littoral States.

30. S. Shenker, ‘‘Growing Threats of Maritime Muggers,’’ available online:<http://www.bbc.co.uk> (accessed on 25 May 2006).

31. Article 101 of the UN Convention on the Law of the Sea (UNCLOS) 1982defines ‘‘piracy’’ as:

(a) any illegal acts of violence or detention, or any act of depredation,committed for private ends by the crew or the passengers of a private shipor a private aircraft, and directed:

(i) on the high seas, against another ship or aircraft, or against persons orproperty on board such ship or aircraft;

(ii) against a ship, aircraft, persons or property in a place outside thejurisdiction of any State;

(b) any act of voluntary participation in the operation of a ship or of an aircraftwith knowledge of facts making it a pirate ship or aircraft;

(c) any act of inciting or of intentionally facilitating an act described insubparagraph (a) or (b).

32. Defining ‘‘terrorism’’ is a task that is evoking very strong emotions ininternational relations. The term carries different meanings for different people.


Fig. 2.—Attacks in the Straits of Malacca in 2004, Recorded by the IMB

Source: International Maritime Bureau.

commit their deeds for monetary and commercial reasons, while terroristsare out to score political points and make ideological statements and, indoing so, are not interested in commercial gains. Although there areperceived links between piracy and terrorism, especially after 9/11, they aredistinctly separate from one another from the point of view of theinternational law. Thus far, a definitive association between the two has yetto be established, although security analysts have spoken of the possibility ofterrorists ‘‘subcontracting’’ their dirty deeds to pirates. Anxiety over thispossibility continues to be based on mere opinions inclined towards worst-case scenarios and questionable perceptions rather than solid intelligence.

Despite the negative publicity given to the security situation in theStraits due to piratical attacks and heightened threat perception post-9/11,

The U.S. Central Intelligence Agency (CIA) defines terrorism as ‘‘premeditated,politically motivated violence perpetrated against noncombatant targets by sub-national groups or clandestine agents, usually intended to influence an audience.’’The United Nations General Assembly is considering a draft ComprehensiveConvention on International Terrorism, which would include a definition ofterrorism.


Fig. 3.—Attacks in the Straits of Malacca in 2005, Recorded by the IMB

Source: International maritime Bureau.

there is only a 1 in 2,000 risk of an attack occurring in the area.33 Given thevery low number of other incidents such as collision and pollution in theStraits given the tremendous volume of traffic, the measures taken and theinfrastructure put in place by the littoral States can be lauded as effective.But, needless to say, this success has come at a very high financial cost.

EFFORTS BY THE LITTORAL STATES TO ENHANCE SECURITYIN THE STRAITS OF MALACCA

The littoral States of the Straits have undertaken various initiatives aimed atcurbing the menace of piracy and securing the waterway from the threats ofterror. These measures include:

33. On the basis of 38 attacks in the Straits in 2005 as reported by the IMBagainst 62,621 ships traversing the Straits in the same year as reported by theMalaysian Marine Department.


(1) The implementation of MALSINDO, a coordinated patrol schemeinvolving the navies of Singapore, Malaysia, and Indonesia. Thetrilateral initiative, launched in July 2004, is a joint special task forceby the littoral States to safeguard the Straits and provide effectivepolicing along the waterway. MALSINDO is an improvement ofseveral bilateral coordinated patrols previously conducted amongthe littoral States. It entails the coordination of patrols by a littoralState in its jurisdiction and sovereignty area with other patrolpartners in other areas and with the command centers in thevarious countries. This initiative has made naval patrols in theStraits more coordinated and structured.

(2) The ‘‘Eyes in the Sky’’ (EIS) initiative, a maritime air operation forsurveillance over the Straits of Malacca and Singapore. Thisinitiative is to detect and deter acts of piracy and transnationalcriminal activities in the Straits. The EIS initiative began inSeptember 2005 and currently features combined maritime airpatrols by the Armed Forces and maritime enforcement agencies ofthe littoral States and invited international participating nations.The EIS initiative is an open arrangement that may invite theparticipation of other countries on a voluntary basis, if deemednecessary, by the littoral States. Each EIS flight involves a CombinedMission Patrol Team on board, a Mission Commander in charge ofthe safe conduct of the mission and the after-flight report, andobservers from participating nations.

(3) The increase in multilateral security initiatives among the littoralStates, including dialogue among them via the ASEAN RegionalForum platform, and bilateral initiatives such as exercises betweenthe Malaysian and Indonesian navies, and joint operations betweentheir maritime enforcement agencies.

(4) The formation of Malaysian Maritime Enforcement Agency, a CoastGuard-like outfit providing sea-going maritime constabulary ser-vices to vessels traveling in Malaysian waters.

(5) The increased patrols by the Marine Police of the littoral States inthe Straits, which have resulted in several arrests of pirates andarmed gang robberies, and the prosecution of the perpetrators.

(6) The increase in the capacity and scope of several security systemsalready in place involving sea surveillance, vessel traffic and shipreporting.

In addition to these initiatives, several regional and internationalinitiatives have been established in the South East Asian region to boostsecurity. These include an agreement on information exchange andestablishment of communication procedures, a treaty of mutual assistance


in criminal matters and a regional forum framework on measures againstterrorism, counter-terrorism, and transnational crime. An agency namedthe South East Asian Regional Center for Counter-Terrorism has been setup, while agreements have been reached between ASEAN members and itsdialogue partners such as the U.S. and EU with reference to cooperationagainst terrorism and cooperation in the field of security. The RegionalCooperation Agreement on Combating Piracy and Armed Robbery againstShips in Asia (ReCAAP) initiative also aims to enhance the security ofregional waters and to enhance multilateral cooperation among countriesin the region.

The manner and speed in which the initiatives were implementedunderline the seriousness with which the littoral States are combating piracyand transnational criminal activities in the Straits of Malacca. They alsoreflect the genuine commitment of the States to forging regional maritimesecurity cooperation and enforcement. While it is not realistic to expectzero piracy in the huge area of the Straits, it is reasonable to attribute therecent drastic drop in piracy attacks in its waters to the intensified effortsundertaken by the littoral States. Perhaps it is too early to evaluate theeffectiveness of initiatives such as the coordinated patrols and the EISprogram, but it is fair to expect security in the area to improve even moreonce all the security measures in place are running full steam.

The littoral States have spent huge amounts of resources to establish,maintain, and enhance security and navigational safety in the Straits. Giventhe rising financial costs of these measures to the littoral States, it is only justthat international users of the Straits, who benefit from their usage of thesea-lane, chip in to share the burden of making the Straits secure.

TOWARDS SECURING ENERGY TRANSPORTATION IN THESTRAITS OF MALACCA

Given the importance of the Straits of Malacca as a critical waterway intransporting energy, serious attention is warranted on protecting the sea-lane from various threats that may hamper the smooth flow of this process.The littoral States continue to face a plethora of challenges—whetherexisting or emerging—in managing the Straits and safeguarding energytransportation in the waterway in the years ahead. They will have to stay onguard to maintain safe passage in the increasingly busy waterway whilebalancing their interests with those of the international community. Onlypersistent monitoring of the Straits to protect it from the many threatsoutlined in this article will ensure comprehensive security in this vital energypassage.

Many of the threats faced by the Straits stem from the enormousamount of shipping traffic through the passage, which is forecast to increase


in the years to come. The huge volume of traffic brings with it manychallenges to the littoral States, namely to facilitate the safe navigation ofships, to avoid and counter the threat of pollution from ships, to provide theresources for maintaining and managing the Straits, and to secure thewaters from the threat of piracy and potential acts of terror. While thelittoral States have done a commendable job of addressing all theseconcerns, it would not be fair of the international community to expectthem to shoulder these tasks alone without assistance in cash and in kind.Bearing in mind that much of the traffic traversing the Straits does notbenefit the littoral States economically, the international users should feelmorally obliged to share their resources with the littoral States insafeguarding the Straits. Such assistance should not have any stringsattached; in no way should it be conditional or, even worse, intrude on thesovereign rights of the littoral States.

Energy supply chain vulnerabilities must be emphasized and addressedin order to secure the chain from acts of sabotage and terror. Terroristgroups have been proven not only to find energy transportation anattractive target, but also to have the means of inflicting serious damage tothe components of the energy supply chain. While a slew of measures hasbeen introduced since the 9/11 attacks to buttress the defense of themaritime sector and its supply chain, most have been focused on theintermediate stages of the chain, namely ports and shipping; moreover,these measures have mainly focused on containerized cargo. There hasbeen little attention given to securing energy transportation from potentialattacks, which can inflict equally harsh damages to the sector and, if severeenough, may even trigger a chain effect that could cripple the entire globaleconomy. Although the possibility is remote, oil tankers are exposed to actsof terror, especially in a busy and narrow passageway such as the Straits ofMalacca where ships have to travel at low speed. The increasing demand forenergy from developing economies in the region will lead to an even greaternumber of energy-carrying vessels in the waters of the Straits, thusincreasing the vulnerability of ships in these waters to those with evilintentions. The world, already edgy from the 9/11 attacks and a few othersafter that, simply cannot afford a ‘‘terrorist spectacular’’ on energy-carryingvessels in a strategic sea-lane such as the Straits of Malacca. The closure ofthis critical passageway, even for a short period, resulting from the ensuingoil spill could have a cataclysmic effect on international shipping and theglobal economy.

In securing energy transportation in the Straits, it is essential to engagein burden sharing among all parties involved in the entire energy supplychain—from energy producers, to shippers, to ports, to the end users. Allthe stakeholders must realize that securing the chain from security threatsand ensuring its smooth flow hinges upon teamwork. Maintaining securityshould be a priority for all involved, and as such, needs to be planned and


carried out collectively without undermining the interests of those involved,and in a manner that will facilitate the smooth transportation of energyalong the supply chain. Securing energy transportation in this vital waterwayshould therefore be everybody’s responsibility, not just the sole obligation ofthe littoral States.

Measures to neutralize the threats on energy transportation in theStraits should be viewed in the context of an overarching security frameworkaimed at preventing and deterring threats of terrorism rather than tomerely reacting to security threats. A comprehensive approach is needed totie the various players and components together into a cohesive energysupply chain security blueprint based on a proactive rather than reactive,and anticipative rather than passive, doctrine. The measures already inplace to improve security in the Straits are well and good, but the next stageof security planning should encompass the allocation of resources towardimproving training, capacity building, procedures, systems, and intelligence.These improvements should be aimed not only at protecting shipping butalso confronting the threats directly, for example, taking the fight toterrorists beyond the waters of the Straits and the energy supply chain.

Beyond the chain, other players in energy transport and logistics mustplay their part in facilitating the uninterrupted, efficient, and reliable flowof energy along the supply chain. They must assess the vulnerabilities withinthe domain of their operations and undertake efforts to secure their portionof the supply chain. To improve the energy supply chain security, the wholesupply chain network must also be secured; every single party in the chainmust be made accountable for the security of the precious commoditiesmoving along it. This requires accountability and resources from allinvolved. Such an approach would enhance energy security transportationstandards and practices not only in the Straits of Malacca but all along themaritime and energy supply chain. This calls for closer cooperation, inter-operability, sharing of intelligence and quick decision making amongvarious stakeholders and enforcement agencies in the Straits.

The international community must match words with deeds andexpectation with actions to help littoral States address security concerns inStraits in a cooperative manner that does not infringe upon the sovereigntyand territorial integrity of these States. Given the many interests, perspec-tives, and views at hand, it is important that measures taken to mitigate thethreats facing energy transportation in the Straits are undertaken in aconsensual manner. They must be carried out in full consultation with thelittoral States and must take cognizance of their sensitivities and nationalinterests. It is thus crucial that stakeholders of the Straits find commonground amidst divergent interests and perspectives for the sake ofprotecting this pivotal waterway.

To meet these daunting challenges, it is imperative that policies on themanagement of the Straits of Malacca are made based on solid, reliable, and


updated information. A comprehensive approach to securing the Straitsfrom the security threats that it faces is needed to construct a solidframework around which policymakers and other stakeholders can makesound judgments and nuanced decisions with regard to their interests andpriorities concerning energy transportation in the Straits. Constant evalu-ation should be conducted by security planners, enforcement agencies, andmaritime and energy stakeholders to address security threats to energytransportation in the Straits in a collaborative manner. Such an approachwould help the stakeholders to plan and allocate their resources effectivelyand to balance commercial needs with the need to protect energytransportation in this critical sea-lane.

Maritime Transport and Security

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